Arcutis Biotherapeutics, Inc. (NASDAQ: ARQT)

Sector: Healthcare Industry: Biotechnology CIK: 0001787306
Market Cap 3.78 Bn
P/B 23.94
P/E -85.37
P/S 11.90
ROIC (Qtr) -14.53
Div Yield % 0.00
Rev 1y % (Qtr) 121.69
Total Debt (Qtr) 113.77 Mn
Debt/Equity (Qtr) 0.72

About

Arcutis Biotherapeutics, Inc., with its ticker symbol ARQT, is a commercial-stage biopharmaceutical company operating in the dermatological industry. The company is focused on developing and commercializing treatments for dermatological diseases with high unmet medical needs. Arcutis Biotherapeutics' main business activities revolve around the identification of molecules against validated biological targets in dermatology, and the development and commercialization of best-in-class products based on those molecules that address significant unmet...

Read more

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 47.43M provide 47.43x coverage of short-term debt 1M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 355.60M provides 3.13x coverage of total debt 113.77M, indicating robust asset backing and low credit risk.
  • Short-term investments of 143.95M provide solid 1.55x coverage of other current liabilities 92.97M, indicating strong liquidity.
  • Cash reserves of 47.43M provide solid 131.74x coverage of other non-current liabilities 360000, indicating strong liquidity.
  • Short-term investments of 143.95M provide healthy 0.58x coverage of working capital 249.45M, indicating strong liquidity.

Bear case

  • Operating cash flow of (32.56M) barely covers its investment activities of 38.80M, with a coverage ratio of -0.84, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 38.80M provide weak support for R&D spending of 71.08M, which is 0.55x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Short-term investments of 143.95M significantly exceed cash reserves of 47.43M, which is 3.04x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of (32.56M) shows concerning coverage of stock compensation expenses of 39.70M, with a -0.82 ratio indicating potential earnings quality issues.
  • High receivables of 115.12M relative to inventory of 22.42M (5.13 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,446.17 Bn -1,569.17 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 439.23 Bn 6,407.40 88.33 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 120.62 Bn 32.82 10.29 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 84.40 Bn 18.44 5.92 2.71 Bn
5 ALNY Alnylam Pharmaceuticals, Inc. 56.13 Bn 1,288.39 17.49 3.21 Bn
6 ARGX Argenx Se 47.89 Bn 31.79 24,973.95 -
7 BNTC Benitec Biopharma Inc. 42.45 Bn -1,015.00 0.00 0.00 Bn
8 INSM INSMED Inc 32.67 Bn -27.60 73.08 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 10.30 12.96
EV to Cash from Ops. EV/CFO -117.36 23.73
EV to Debt EV to Debt 33.59 772.65
EV to EBIT EV/EBIT -133.29 -11.30
EV to EBITDA EV/EBITDA -113.80 7.11
EV to Free Cash Flow [EV/FCF] EV/FCF -114.94 22.12
EV to Market Cap EV to Market Cap 1.01 68.89
EV to Revenue EV/Rev 12.02 199.70
Price to Book Value [P/B] P/B 23.94 22.62
Price to Earnings [P/E] P/E -85.37 -12.30
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -12.02
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.17
Dividend per Basic Share Div per Share (Qtr) 0.00 0.01
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -0.15
Interest Coverage Int. cover (Qtr) -1.96 857.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -360.40 -27.24
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -64.99 747.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 82.33 -48.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 81.33 -2.09
EBIT Growth (1y) % EBIT 1y % (Qtr) 82.71 -57.79
EBT Growth (1y) % EBT 1y % (Qtr) 77.82 -14.35
EPS Growth (1y) % EPS 1y % (Qtr) 78.92 -30.88
FCF Growth (1y) % FCF 1y % (Qtr) 80.19 -32.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 130.22 227.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.86 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 0.48 3.79
Current Ratio Curr Ratio (Qtr) 3.50 7.23
Debt to Equity Ratio Debt/Equity (Qtr) 0.72 0.42
Interest Cover Ratio Int Coverage (Qtr) -1.96 857.11
Times Interest Earned Times Interest Earned (Qtr) -1.96 857.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -7.50 -18,509.94
EBIT Margin % EBIT Margin % (Qtr) -9.02 -18,862.18
EBT Margin % EBT Margin % (Qtr) -13.62 -19,783.19
Gross Margin % Gross Margin % (Qtr) 90.00 -8.62
Net Profit Margin % Net Margin % (Qtr) -13.90 -19,732.60